Tuesday, 23 April 2024
Rise of Chinese influence strengthens RMB demand
SWIFT has released the June 2019 special edition of its RMB Tracker, which studies the latest trends that are influencing the rate of RMB growth in China and globally.
The rising global influence of the RMB is due to China’s re-emergence as an economic superpower. This is summed up across four trends:
1. The shift of China’s economy to consumption and services
2. The emergence of the ‘new economy’
3. The rise of the middle class
4. The liberalisation of China’s current and capital accounts
Key findings:
- The RMB’s share of international payments increased by 0.06% from 1.82% in April 2016 to 1.88% in April 2019. However, excluding intra-Eurozone payments, the value has decreased by 0.11% from 1.31% to 1.20% within the same time period.
- Chinese imports and exports to countries along the BRI reached RMB 16.8 trillion in the first three quarters of 2018. This is an increase of 13.2% compared to 2017.
- Between 2014 and 2018, payments traffic to and from China with some countries along the ‘Silk Road Economic Belt’ surged.
๐ For example, Hungary, Turkey and Uzbekistan saw increases of 242%, 35% and 170% respectively during this period.
๐ In Southeast Asia, Singapore has experienced payment traffic growth with China of 231%. Similarly, Vietnam has experienced 301% in payment traffic growth with China.
The RMB tracker also carries a contribution from the Official Monetary and Financial Institutions Forum (OMFIF). Adam Cotter, Head of Asia and Chief Representative of OMFIF Singapore, mentions the advantages of adopting the RMB but notes that the RMB system is still insufficient for global adoption.
Re-disseminated by The Asian Banker
